Eukaryotic cells have a highly conserved enzymatic system for the ligation of ubiquitin to proteins. Moreover, polypeptides distinct from but related o ubiquitin, called ubiquitin-like proteins or Ubls, can also be conjugated to proteins. Ligation to each Ubl has unique mechanistic and functional consequences. SUMO (encoded by SMT3 in yeast) is a highly divergent Ubl. The SUMO ligation system has crucial roles in many organisms, including important contributions to human biology. SUMO, like ubiquitin, is synthesized in precursor form, requiring enzymatic processing of a C-terminal peptide; furthermore, both ubiquitin and SUMO attachment to proteins is reversible. Specialized proteases are responsible for these cleavage reactions. Under the auspices of this grant, our laboratory has been analyzing both deubiquitylating enzymes (DUBs), and more recently, a novel class of SUMO-specific cysteine proteases, the ULPs, which are distinct in primary sequence from the DUBs. Most of this work has been conducted with the yeast Saccharomyces cerevisiae, but the proteins we have been studying are conserved from yeast to humans. The long-term objective of the project is to gain a molecular understanding of the physiological and mechanistic roles played by DUBs and ULPs. In this renewal application, the proposed experiments are concentrated on SUMO modification (sumoylation) in yeast, as was true in the last cycle, and on the contributions of the two yeast desumoylating enzymes, Ulp1 and Ulp2, to the function of the SUMO system. Mutation of either ULP has strong effects on growth and division, and Ulp1, like SUMO itself, is essential for cell- cycle progression. Among the elements of the SUMO system we uncovered in the last cycle of this grant were the SUMO-targeted ubiquitin ligases (STUbLs), which can mediate the degradation of polySUMO-modified proteins. In this renewal, we will explore novel features of this crucial and highly interconnected regulatory system, including the ULPs and STUbLs. Results from our recent Ulp1 and Ulp2 studies have also unexpectedly directed us toward several specific areas of biological regulation. Based on these new findings, we propose experiments in the following three areas: (1) Identification of in vivo SUMO-dependent substrates for the STUbL Slx5-Slx8 and the characterization of the consequences of their (poly)SUMOylation both in vivo and in vitro; (2) Investigation of the mechanistic basis of SUMO- mediated regulation of the inositol biosynthetic pathway and links to the ER unfolded protein response; and (3) Determination of the functional interplay of the SUMO protease Ulp2 and polySUMO chains, including potential roles in gene silencing and transcriptional control.